“FIAA stands as the epitome of excellence in representing the international business community in Albania”
FIAA: Stela, you recently joined for the second time as Member of the Board of Directors of FIAA. What is your perspective for the upcoming two years in the organization?
Mrs. Dhami: Dear Marinela, President D’Oria, esteemed Board members, and honorable members of FIAA,
I am deeply honored to be granted the opportunity to serve on the Board of FIAA for another two-year term. In my view, FIAA stands as the epitome of excellence in representing the international business community in Albania. Over the years, it has played a pivotal role as the primary intermediary between the business sector and the government, driving numerous beneficial business initiatives. Recently, the establishment of the Energy Council and the HR Committee exemplify FIAA’s commitment to enhancing the significance of the energy sector and the impact human resources have in our enterprises.
Looking ahead, I firmly believe that FIAA will persist as a catalyst for positive change and further strengthen its position as a key advocate for foreign investment in our country. In relation to my industry, real estate, I wish to encourage FIAA to direct more attention in this domain, possibly by forming a committee that specifically focuses on real estate, particularly the flourishing tourism sector, which has experienced remarkable growth in recent years.
I am excited about the prospects that lie ahead for FIAA and the impact we can collectively create for the international business community in Albania. I am committed to contributing my utmost to ensure our shared vision becomes a reality.
Your company, Colliers Albania is a key contact for the real estate market in the country. Could you tell us more on how this market has developed in the recent years?
Thank you for your kind words, Marinela. Colliers took the pioneering step of establishing the first commercial real estate office in Tirana back in 2007, driven by the visionary leadership of our previous regional director who always had unwavering faith in the future of our country. Since then, Albania has experienced remarkable growth, particularly in the development of large-scale residential complexes and a substantial increase in office space stock. Additionally, the Adriatic and Ionian rivieras have witnessed the emergence of high-quality hotels, a sector that has seen rapid advancement with the invaluable assistance and expertise of international brands, many of whom we engage with on a daily basis. While the initial two sectors largely developed speculatively, the latter sector is rapidly evolving, thanks to the involvement and know-how of these renowned international brands.
Colliers Albania have recently published the latest Market Overview Report covering the Albanian Real Estate Market. What is really happening with the real estate market in Albania?
The residential market is currently experiencing the effects of escalating commodity prices, and higher inflation rates, partly influenced by the COVID-19 pandemic and the situation in Ukraine. As a result, consumers are facing increased sales prices. Remarkably, we are witnessing sales prices reaching as high as 3.500-6,000 EUR/m2 in the capital city of Tirana, a phenomenon that was unimaginable just a few years ago. The total office stock has expanded to 140,000 m2, which, considering Albania’s accelerated progress towards EU integration, is still relatively modest. However, due to the majority of office buildings being under private ownership and developed with limited bank financing, we are witnessing some of the highest rental rates in the region. On average, rents stand at 17 EUR/m2, while asking prime rents have reached as high as 30 EUR/m2.
Hotels in Albania are undergoing development primarily led by local developers, who are actively partnering with international brands to elevate their prominence and gain valuable management expertise. These brands are enthusiastic about expanding their network, driven by their customers’ desire to explore new destinations. As we are the final market to develop in the Adriatic and Ionian region, it is crucial that we approach this development thoughtfully, considering the preferences of tourism customers and prioritizing environmental sustainability, a key focus for both customers and brands. The influx of numerous international hotel chains to Albania, including Hilton, Melia, Maritim, Intercontinental, Mercure, M Gallery, Hyatt Regency, and more, is becoming increasingly evident. As these renowned brands and the investors they represent establish their presence in our country, it becomes essential for them to take on the responsibility of being good stewards of the places they conduct their business in.
Is nearshoring the future of SEE? Any future for Albania?
Nearshoring is gaining prominence as the future of Southeastern Europe (SEE) due to the combined influence of COVID-19 and the Ukrainian war on global manufacturing. Western and Central European companies experienced significant delays in receiving goods from traditional manufacturing hubs like China and other Asian countries during and after the pandemic, impacting pricing and customer satisfaction. Consequently, European companies have had to adapt their production processes to cater to customers efficiently and reduce manufacturing timelines.
Southeastern Europe emerges as an ideal location for in-house production, with Albania being particularly appealing. Its advantages include a young and skilled labor force, cost-effective labor and human resources, and a strong willingness to learn. Furthermore, the region boasts excellent geographical connectivity, though efforts are needed to further develop transportation links to ensure timely and high-quality delivery of goods throughout Europe.
Albania has made significant strides in light production, especially in shoe wear and clothing manufacturing, over the past three decades. However, the potential for growth in light industrial manufacturing remains untapped, particularly in the car parts manufacturing industry, which presents exciting opportunities for further expansion.
Finally, what are the biggest challenges in doing business in the real estate industry in Albania?
The persisting problem of unclear land titles and the absence of proper zoning across the country create challenges in obtaining accurate information and presenting it to potential investors interested in investing in Albania. However, once these issues are addressed and resolved, the country is poised to experience significant growth in the real estate sector, both in central cities and coastal areas.